Health Services Union whistleblower Kathy Jackson allegedly gave her husband, Jeff Jackson, $50,000 from a slush fund she controlled as part of a property settlement, the Royal Commission into Trade Union Governance and Corruption has heard.

Ms Jackson told a previous hearing she believed a $50,000 bank cheque she gave her ex-husband was for fighting a union election.

But in startling evidence on Wednesday, Mr Jackson said he received a $50,000 cheque in March 2009 from Ms Jackson as part of a divorce property settlement. The royal commission has heard the $50,000 payment was made a day after Ms Jackson shifted the same amount of money in union members' funds to a separate Commonwealth Bank account that she controlled.

The money was deposited into a joint bank account Mr Jackson held with Ms Jackson, which he said he solely operated in 2009.

Asked about a series of withdrawals from the Westpac bank account, Mr Jackson said one for $11,000 made in April 2009 was for a deposit on a "beautiful Saab 93 convertible". He later redeposited the $11,000 after the car purchase fell through.

Other withdrawals, including one for a florist, were made to pay for various household and domestic expenses.

Advertisement

Asked whether he was aware of the source of the funds from Ms Jackson, Mr Jackson said: "No. Would you ask somebody if ... they owed you money, they hand you a bank cheque?

"It was hers as far as I was aware."

In June, Ms Jackson accused counsel assisting. Jeremy Stoljar, SC, of "ambushing her" when he first asked her about the $50,000 cheque. He said the same amount of union members' money had been moved a day earlier to the slush fund Ms Jackson controlled.

She originally said she could not remember the purpose of the payment, but at a later hearing in July said she believed it was for a fighting a union election.

Mr Jackson, who split with Ms Jackson in March 2008, said he received another payment for $58,000 in April 2010 for political electoral purposes.

Under cross-examination by Ms Jackson's barrister, David Pritchard, Mr Jackson later admitted there was some "confusion in my memory between the $58,000 and the $50,000".

Mr Jackson told the commission he has suffered from memory lapses since being in a coma for six months when he was younger.

"My memory is just not capable of detail that involves numbers or dates," he said.

Jane Holt, accountant for the HSU's Victoria No.3 branch, later gave evidence that the $58,000 payment to Mr Jackson was for accrued entitlements for his former employment as secretary of the No.1 branch. She said the Victoria No.1 branch had inadequate cash to make the payment and borrowed it from the No.3. branch.

Under cross-examination, Katharine Wilkinson, a former member of the Victoria No.3 branch committee said she had no knowledge of withdrawals of branch funds for large amounts including $8500 and $5300.

Ms Jackson told the royal commission in June that her only record of such transactions were kept in an exercise book that had gone missing.

In earlier evidence on Wednesday, a recording of an intercepted phone conversation was played revealing details of a plan hatched to sack Ms Jackson from the union.

During the conversation on March 2, 2012, corrupt former HSU boss Michael Williamson is heard discussing the plan with Chris Brown, now the acting HSU national secretary. Mr Brown proposes appointing an ombudsman to investigate Ms Jackson.

"We charge her, we sack her; right?" Mr Brown says.

Williamson responds: "That's fine. And then HSU East will then similarly fine her and sack her as well."

"She just rides down there, no instructions from the executive and says there should be a judicial inquiry into the union ... Who in the hell does she think she is?"

Mr Brown then replies: "And it's [Liberal member of Parliament Eric] Abetz she's running it with, which makes it even worse."

In a later taped conversation on March 12, 2012, Mr Williamson says: "We might have started the tom-toms for Kathy" in relation to a financial record of $522,000, "which I think are just related employee salaries or whatever, but the way the accounts have been put in ... makes out like it's hers, which I don't think it is".

Williamson then says he will announce an independent audit of Ms Jackson's branch of the union the following week.

Mr Brown told the royal commission on Wednesday he was still dealing directly with Williamson long after he stepped down from the union leadership in November 2011.

He said he supported the plan to get rid of Ms Jackson because she had been problematic for the union.

Mr Brown said the collateral damage for the union was great after she blew the whistle on Williamson's corruption.

Williamson, who has been jailed for at least five years for fraud, ran the union for 16 years until a Fairfax Media investigation in 2011 revealed his cronyism and corruption.

Fairfax Media's revelations sparked an internal investigation led by barrister Ian Temby, QC, that showed Williamson and his family received more than $5 million from the union in the previous few years alone.